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Lake Elmo loosens restrictions on bed-and-breakfasts, Airbnb rentals

The Lake Elmo City Council changed the city’s ordinance regarding short-term rentals at places like bed-and-breakfasts and Airbnbs to make it easier for residents throughout the city to rent out their homes.

Until the Feb. 7 city council meeting, short-term rentals were allowed as a conditional accessory use in all housing districts except those zoned rural single family and residential estate, as long as the owner met a series of requirements, including obtaining a conditional use permit.

The city’s planning director, Emily Becker, explained at the meeting that getting a conditional use permit is a lengthy process because it requires a public hearing and council approval. In addition, conditional use permits cost property owners $1,050, plus a $500 escrow fee.

With the changes to the ordinance, residents looking to use their homes as bed-and-breakfasts or Airbnb rentals will only have to pay $100 for a two-year bed-and-breakfast permit and meet a handful of permitting requirements, making for a much shorter process than getting a conditional use permit.

“The permit would allow the city to actually track bed-and-breakfasts, and it would have application requirements, and the application would have to prove that the standards of bed-and-breakfasts are met,” Becker said.

The council voted 3-1 to make short-term rentals a permitted use in all housing districts. Council member Jill Lundgren opposed the move and council member Julie Fliflet was absent.

The council also approved a series of amendments to the ordinance removing the staff-recommended definition of owner-occupied and the staff-recommended requirement to notify neighbors. The council also moved to eliminate the previously existing requirements that a host maintain a guest register and limit their guests’ stays to seven days or fewer. However, it did add a 30-day limit to the length of time a guest can stay at a bed-and-breakfast.

By loosening restrictions on short-term rentals, council member Justin Bloyer said the city was backing away from “regulating something that we absolutely do not need to regulate.”

In voting against the changes, Lundgren said she was opposed in general to allowing short-term rentals in areas zoned rural single family and residential estate.

According to Becker, the planning commission also had concerns and recommended that short-term rentals not be allowed in these zoning districts due to their smaller lots, parking concerns and preserving the rural feel.

“We ought just to either ban it outright throughout the city or allow it across the board in housing areas,” said Mayor Mike Pearson.

Pearson pointed out that he does not anticipate any problems with the changes, but added that if any come up, the council can alter the ordinance at that time. Council member Christine Nelson said that short-term rentals seem like a great way to get people to visit the area.